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macavoyd
New Member

I may have K-1 ubit income in an IRA how is this handled

 
1 Best answer

Accepted Solutions
MargaretL
Employee Tax Expert

I may have K-1 ubit income in an IRA how is this handled

Edited: 01/31/2017 I think you mean UBTI...

There is no additional handling required on your part.

If the IRA earns more than $1000 in unrelated business income as reported on K-1, the IRA will pay tax, you need to conact your IRA custodian.

If the IRA earns  $1000 or less, there is nothing you need to do on your tax return. There is a tax deduction for the first $1,000 in UBTI each year from all sources within your tax-deferred accounts.



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8 Replies
MargaretL
Employee Tax Expert

I may have K-1 ubit income in an IRA how is this handled

Edited: 01/31/2017 I think you mean UBTI...

There is no additional handling required on your part.

If the IRA earns more than $1000 in unrelated business income as reported on K-1, the IRA will pay tax, you need to conact your IRA custodian.

If the IRA earns  $1000 or less, there is nothing you need to do on your tax return. There is a tax deduction for the first $1,000 in UBTI each year from all sources within your tax-deferred accounts.



macavoyd
New Member

I may have K-1 ubit income in an IRA how is this handled

I know the above answer is WRONG. UBIT income over $1000 in an IRA IS taxable. I just do not know how Turbo Tax will let me account for it. Does anyone out there have an answer.
MargaretL
Employee Tax Expert

I may have K-1 ubit income in an IRA how is this handled

I have edited my answer... yes, the income IS taxable, but the custodian/trustee files the tax return.
macavoyd
New Member

I may have K-1 ubit income in an IRA how is this handled

Just to clarify, when they File the Tax return do they also pay the Tax with money in the account. Thanks for the help .
MargaretL
Employee Tax Expert

I may have K-1 ubit income in an IRA how is this handled

Yes, the funds are paid out of the IRA account.
frank112
Level 3

I may have K-1 ubit income in an IRA how is this handled

I called the custodian and they said that they will not file the 990-T and that my SDIRA LLC within the custodian account will have to and pay any taxes due to UBTI.

 

This is preferred so I control the process and not share my SDIRA LLC return with the custodian, less fees as well.

 

Any concerns with the above?

 

Does the IRA LLC need to file a 1040 and within it the 990T?

Can TTax help with the LLC tax return and relative 990T?

 

thanks

Critter-3
Level 15

I may have K-1 ubit income in an IRA how is this handled

Self Directed IRA's have their own issues and if you put an LLC inside the IRA then it is that LLC's responsibility or YOUR responsibility to file the form if the IRA broker says it is not responsible. 

dmertz
Level 15

I may have K-1 ubit income in an IRA how is this handled

TurboTax does not support Form 990-T.

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